Companies hopeful of economic recovery in 2021

MANILA, Philippines — To say that 2020 is a difficult year is an understatement. Tycoons, presidents and boards of listed companies were jolted out of their comfort zones. As months passed on, many tycoons and CEOs aged and lost weight. The stress COVID-19 brought to their businesses and their personal lives, after all, was no laughing matter.

When COVID-19 struck and the government imposed lockdowns, businessmen, although locked up in their homes, panicked because it seemed at the time that – as Chicken Little had warned – the sky was falling.

Malls had to close and many non-essential businesses had to shut down.

As early as April, even ports and casino tycoon Enrique Razon, a successful mogul who thrives in crisis and adverse situations, said he was writing off 2020.

“We will have to tally up the losses later on,” he said in an interview on Bloomberg TV in April.

“The only thing that counts now is defeating the virus,” he said at the time, adding that the concerns of business were secondary at that point.

What was important, Razon said early on, was to get the infection down.

Razon’s behemoth port operator International Container Terminal Services Inc. is present in 19 countries and around 35 cities around the world, from Manila to Madagascar.

Volumes at ICTSI fell 10 to 15 percent in March, two months after COVID-19 erupted and his casino hotel Bloomberry had to close because of the Luzon-wide lockdown.

Around that time, listed budget carrier Cebu Pacific, which was profitable before COVID-19 happened, was also counting the losses even as it supported the lockdowns.

“Let’s take the pain now so we can come back tomorrow,” said Cebu Pacific president Lance Gokongwei at the time.

As of end March, after a two-week strict lockdown, the Philippine Stock Exchange Composite Index  was down 22 percent, one of its biggest monthly losses in its recent history.

COVID-19 response

But at the end of the first quarter, businessmen had already accepted the situation and instead prioritized their respective COVID-19 responses.

Perhaps they felt that the better the virus was contained, the sooner the country, the economy and their businesses could recover.

In response to the COVID-19 crisis, top business groups in March raised over P1.5 billion to fund the distribution of grocery vouchers to urban poor residents in the Metro Manila Area.

Project Ugnayan distributed P1,000 gift certificates to over 1 Million households in the poor communities of the greater Manila area.

The business groups that supported Project Ugnayan were Aboitiz Group, Lopez Group, Alliance Global, AY Foundation and RCBC, Ayala Corp., Century Pacific, Concepcion Industrial Corp, DMCI, Gokongwei Group, ICTSI, Jollibee, Leonio Group, Mercury Drug, GT Capital, Nutri-Asia,/Liwayway Marketing Group, MVP Group, Puregold, San Miguel Corp. and the Sy Group.

LT Group Inc., the listed conglomerate of taipan Lucio Tan, for its part, repurposed its facilities to produce ethyl alcohol to be distributed to frontline health workers.

Under a disaster-relief program dubbed “Help Flows,” LTG donated 400 4-liter bottles equivalent to 1,600 liters of ethyl alcohol, which is part of the total 20,000 liters it committed to deliver to the Department of Health (DoH).

Aside from alcohol, LTG, producer of bottled water brands Summit and Absolute, also turned over to the Department of Health 70,000 bottles of Absolute 350ml and 3,000 six-liter bottles of distilled drinking water plus 2,000 pieces of N95 face masks.

Ramon Ang-led San Miguel has likewise emerged as a major private-sector partner in tackling the pandemic.

With its considerable resources, and with the help of employees, volunteers, and its partner non-profit organizations and charitable institutions, SMC initiated numerous projects to help the country better cope with the impact of COVID-19.

Its total COVID-19 response has reached at least P13.187 billion.

Future ready

As the months progressed, tycoons embraced the lessons brought about by the COVID-19 era.

While their respective businesses all posted slower growths; losses for the more badly hit ones, they are all targeting to recover in 2021.

JG Summit president and CEO Lance Gokongwei said leaders must be SMART or -- Sustainable, Motivated beyond profits, Agile, Resilient and Transformative -- to be able to stir their companies into the future and far beyond the pandemic.

Moving forward, tycoons believe there would be more uncertainties but they are steering their respective conglomerates with the right attitude and vision, mindful of the lessons brought about by COVID-19.

Ayala chairman Jaime Augusto Zobel de Ayala for instance said it cannot be business as usual anymore. Businesses need to play a bigger role of contributing to more inclusive growth for every Filipino.

He said conglomerates and companies in the Philippines can best navigate through major crises such as COVID-19 by being hyper sensitive to changes and redesigning old practices.

“Leading through the unknown requires us to have hyper-strong sensitivity to the changes happening around and within our organizations, particularly to the many stakeholders inside and outside our companies. I believe that by paying close attention to these signs, we can best steer our companies to stability and growth, while making a meaningful impact to those most vulnerable in these difficult times,” Zobel said.

He said businesses need to rethink how  to serve  consumers with products and services; and how to reach them through the most appropriate channels.

Zobel said a stakeholder-centric and discovery-driven approach to planning is critical in any attempt to reimagine and shape the future.

“Deeply embedded in this framework are three areas where I believe re-imagination is greatly needed today. First, we need to rethink how we serve our consumers with products and services; and how we reach them through the most appropriate channels. Second, we also need to redesign our employees’ working arrangements and how we operate our companies. And third, we need to revisit our commitment as a private sector group to the broader communities around us,” Zobel said.

It is a sentiment shared by other business leaders.

In all, they agreed that a more responsive approach to changing customers’ needs such as enhancing access to digital infrastructure is important.

Michael Ricafort of Yuchengco-owned Rizal Commercial Banking Corp. said the full recovery of businesses and the economy will continue to depend on a more lasting solution on the COVID-19 problem such as an effective and accessible vaccine against it.